Filed by Bowne Pure Compliance





Exhibit 10.18




EMPLOYMENT AGREEMENT




P R E A M B L E




This Employment Agreement defines the essential terms and conditions of our employment

relationship with you. The subjects covered in this Agreement are vitally important to you and to

the Company. Thus, you should read the document carefully and ask any questions before

signing the Agreement. Given the importance of these matters to you and the Company, you are

required to sign the Agreement as a condition of employment.




This EMPLOYMENT AGREEMENT, dated and effective this 31 day of July 2008 is entered into by and
between Hill-Rom Holdings, Inc. (“Company”) and Earl DeCarli (“Employee”).



W I T N E S S E T H:




WHEREAS, the Company and its affiliated entities are engaged in the healthcare industry
throughout the United States and abroad including, but not limited to, the design, manufacture,
sale, service and rental of hospital beds and stretchers, hospital furniture, medical-related
architectural products, specialty sleep surfaces (including therapeutic surfaces), air clearing
devices, biomedical and asset management services, as well as other medical-related accessories,
devices, products and services;



WHEREAS, the Company is willing to employ Employee in an executive or managerial position and
Employee desires to be employed by the Company in such capacity based upon the terms and conditions
set forth in this Agreement;



WHEREAS, in the course of the employment contemplated under this Agreement and as a
continuation of Employee’s past employment with the Company, if applicable, it will be necessary
for Employee to acquire and maintain knowledge of certain trade secrets and other confidential and
proprietary information regarding the Company as well as any of its parent, subsidiary and/or
affiliated entities (hereinafter jointly referred to as the “Companies”); and



WHEREAS, the Company and Employee (collectively referred to as the “Parties”) acknowledge and
agree that the execution of this Agreement is necessary to memorialize the terms and conditions of
their employment relationship as well as safeguard against the unauthorized disclosure or use of
the Company’s confidential information and to otherwise preserve the goodwill and ongoing business
value of the Company;


 


 









 





NOW THEREFORE, in consideration of Employee’s employment, the Company’s willingness to
disclose certain confidential and proprietary information to Employee and the mutual covenants
contained herein as well as other good and valuable consideration, the receipt of which is hereby
acknowledged, the Parties agree as follows:




	1.	 	Employment. As of the effective date of this Agreement, the Company agrees to employ
Employee and Employee agrees to serve as Group Vice President, Care Continuum Services.
Employee agrees to perform all duties and responsibilities traditionally assigned to, or
falling within the normal responsibilities of, an individual employed in the above-referenced
position. Employee also agrees to perform any and all additional duties or responsibilities
as may be assigned by the Company in its sole discretion. The Parties acknowledge that both
this title and the underlying duties may change.






	2.	 	Best Efforts and Duty of Loyalty. During the term of employment with the Company,
Employee covenants and agrees to exercise reasonable efforts to perform all assigned duties in
a diligent and professional manner and in the best interest of the Company. Employee agrees
to devote Employee’s full working time, attention, talents, skills and best efforts to further
the Company’s business and agrees not to take any action, or make any omission, that deprives
the Company of any business opportunities or otherwise act in a manner that conflicts with the
best interest of the Company or is otherwise detrimental to its business. Employee agrees not
to engage in any outside business activity, whether or not pursued for gain, profit or other
pecuniary advantage, without the express written consent of the Company. Employee shall act
at all times in accordance with the Company’s Code of Ethical Business Conducts, and all other
applicable policies which may exist or be adopted by the Company from time to time.






	3.	 	At-Will Employment. Subject to the terms and conditions set forth below, Employee
specifically acknowledges and accepts such employment on an “at-will” basis and agrees that
both Employee and the Company retain the right to terminate this relationship at any time,
with or without cause, for any reason not prohibited by applicable law upon notice as required
by this Agreement. Employee acknowledges that nothing in this Agreement is intended to
create, nor should be interpreted to create, an employment contract for any specified length
of time between the Company and Employee.






	4.	 	Compensation. For all services rendered by Employee on behalf of, or at the request
of, the Company, Employee shall be paid as follows:






	 	(a)	 	A base salary at the bi-weekly rate of Eleven Thousand Five Hundred Thirty-Eight
dollars and Forty Six Cents ($11,538.46), less usual and ordinary deductions;






	 	(b)	 	Incentive compensation, payable solely at the discretion of the Company, pursuant to
the Company’s existing Incentive Compensation Program or any other program as the Company
may establish in its sole discretion; and






	 	(c)	 	Such additional compensation, benefits and perquisites as the Company may deem
appropriate






	5.	 	Changes to Compensation. Notwithstanding anything contained herein to the contrary,
Employee acknowledges that the Company specifically reserves the right to make changes to
Employee’s compensation in its sole discretion including, but not limited to, modifying or
eliminating a compensation component. The Parties agree that such changes shall be deemed
effective immediately and a modification of this Agreement unless, within seven (7) days
after receiving notice of such change, Employee exercises Employee’s right to terminate this
Agreement without cause or for “Good Reason” as provided below in Paragraph No. 11. The Parties
anticipate that Employee’s compensation structure will be reviewed on an annual basis but
acknowledge that the Company shall have no obligation to do so.




 


2









 











	6.	 	Direct Deposit. As a condition of employment, and within thirty (30) days of the
effective date of this Agreement, Employee agrees to make all necessary arrangements to have
all sums paid pursuant to this Agreement direct deposited into one or more bank accounts as
designated by Employee.






	7.	 	Warranties and Indemnification. Employee warrants that Employee is not a party to
any contract, restrictive covenant, or other agreement purporting to limit or otherwise
adversely affecting Employee’s ability to secure employment with any third party.
Alternatively, should any such agreement exist, Employee warrants that the contemplated
services to be performed hereunder will not violate the terms and conditions of any such
agreement. In either event, Employee agrees to fully indemnify and hold the Company harmless
from any and all claims arising from, or involving the enforcement of, any such restrictive
covenants or other agreements.






	8.	 	Restricted Duties. Employee agrees not to disclose, or use for the benefit of the
Company, any confidential or proprietary information belonging to any predecessor employer(s)
that otherwise has not been made public and further acknowledges that the Company has
specifically instructed Employee not to disclose or use such confidential or proprietary
information. Based on Employee’s understanding of the anticipated duties and responsibilities
hereunder, Employee acknowledges that such duties and responsibilities will not compel the
disclosure or use of any such confidential and proprietary information.






	9.	 	Termination Without Cause. The Parties agree that either party may terminate this
employment relationship at any time, without cause, upon sixty (60) days’ advance written
notice or, if terminated by the Company, pay in lieu of notice (hereinafter referred to as
“notice pay”). In such event, Employee shall only be entitled to such compensation, benefits
and perquisites that have been paid or fully accrued as of the effective date of Employee’s
separation and as otherwise explicitly set forth in this Agreement. However, in no event
shall Employee be entitled to notice pay if Employee is eligible for and accepts severance
payments pursuant to the provisions of Paragraphs 16 and 17, below.






	10.	 	Termination With Cause. Employee’s employment may be terminated by the Company at
any time “for cause” without notice or prior warning. For purposes of this Agreement, “cause”
shall mean the Company’s good faith determination that Employee has:






	 	(a)	 	Acted with gross neglect or willful misconduct in the discharge of his/her duties and
responsibilities or refused to follow or comply with the lawful direction of the Board of
Directors of the Company or the terms and conditions of this Agreement providing such
refusal is not based primarily on Employee’s good faith compliance with applicable legal or
ethical standards;






	 	(b)	 	Acquiesced or participated in any conduct that is dishonest, fraudulent, illegal (at
the felony level), unethical, involves moral turpitude or is otherwise illegal and involves
conduct that has the potential, in the Company’s reasonable opinion, to cause the Company,
its officers or its directors embarrassment or ridicule;




 


3









 











	 	(c)	 	Violated a material requirement of any Company policy or procedure, specifically
including a violation of the Company’s Code of Ethics or Associate Policy Manual;






	 	(d)	 	Disclosed without proper authorization any trade secrets or other Confidential
Information (as defined herein);






	 	(e)	 	Engaged in any act that, in the reasonable opinion of the Company, is contrary to its
best interests or would hold the Company, its officers or directors up to probable civil or
criminal liability, provided that, if Executive acts in good faith in compliance with
applicable legal or ethical standards, such actions shall not be grounds for termination
for cause; or






	 	(f)	 	Engaged in such other conduct recognized at law as constituting cause.






Upon the occurrence or discovery of any event specified above, the Company shall have the right
to terminate Employee’s employment, effective immediately, by providing notice thereof to
Employee without further obligation to Employee, other than accrued wages or other accrued
wages, deferred compensation or other accrued benefits of employment (collectively referred to
herein as “Accrued Obligations”), which shall be paid in accordance with the Company’s past
practice and applicable law. To the extent any violation of this Paragraph is capable of being
promptly cured by Employee (or cured within a reasonable period to the Company’s satisfaction),
the Company agrees to provide Employee with a reasonable opportunity to so cure such defect.
Absent written mutual agreement otherwise, the Parties agree in advance that it is not possible
for Employee to cure any violations of sub-paragraph (b) or (d) and, therefore, no opportunity
for cure need be provided in those circumstances.




	11.	 	Termination by Employee for Good Reason. Employee may terminate this Agreement and
declare this Agreement to have been terminated “without cause” by the Company (and, therefore,
for “Good Reason”) upon the occurrence, without Employee’s consent, of any of the following
circumstances:






	 	(a)	 	The assignment to Employee of duties lasting more than sixty (60) days that are
materially inconsistent with Employee’s then current position or a material change in his
reporting relationship to the CEO or his/her successor;






	 	(b)	 	The failure to elect or reelect Employee as Vice President or other officer of the
Company (unless such failure is related in any way to the Company’s decision to terminate
Employee for cause);






	 	(c)	 	The failure of the Company to continue to provide Employee with office space, related
facilities and support personnel (including, but not limited to, administrative and
secretarial assistance) within the Company’s principal executive offices commensurate with
his responsibilities to, and position within, the Company;




 


4









 











	 	(d)	 	A reduction by the Company in the amount of Employee’s base salary or the
discontinuation or reduction by the Company of Employee’s participation at the same level
of eligibility as compared to other peer employees in any incentive compensation,
additional compensation, benefits, policies or perquisites subject to Employee
understanding that such reduction(s) shall be permissible if the change applies in a
similar way to other peer level employees;






	 	(e)	 	The relocation of the Company’s principal executive offices or Employee’s place of work
to a location requiring a change of more than fifty (50) miles in Employee’s daily commute;
or






	 	(f)	 	A failure by the Company to perform its obligations under this Employment Agreement
(other than inadvertent failures that are cured by the Company promptly upon notice from
the Employee).






	12.	 	Termination Due to Death or Disability. In the event Employee dies or suffers a
disability (as defined herein) during the term of employment, this Agreement shall
automatically be terminated on the date of such death or disability without further obligation
on the part of the Company other than the payment of Accrued Obligations. For purposes of
this Agreement, Employee shall be considered to have suffered a “disability” upon a
determination that Employee cannot perform the essential functions of Employee’s position as a
result of a such a disability and the occurrence of one or more of the following events:






	 	(a)	 	Employee becomes eligible for or receives any benefits pursuant to any disability
insurance policy as a result of a determination under such policy that Employee is
permanently disabled;






	 	(b)	 	Employee becomes eligible for or receives any disability benefits under the Social
Security Act; or






	 	(c)	 	A good faith determination by the Company that Employee is and will likely remain
unable to perform the essential functions of Employee’s duties or responsibilities
hereunder on a full-time basis, with or without reasonable accommodation, as a result of
any mental or physical impairment.






Notwithstanding anything expressed or implied above to the contrary, the Company agrees to fully
comply with its obligations under the Family and Medical Leave Act of 1993 and the Americans
with Disabilities Act as well as any other applicable federal, state, or local law, regulation,
or ordinance governing the provision of leave to individuals with serious health conditions or
the protection of individuals with disabilities, as well as the Company’s obligation to provide
reasonable accommodation thereunder.




	13.	 	Exit Interview. Upon termination of Employee’s employment for any reason, Employee
agrees, if requested, to participate in an exit interview with the Company and reaffirm in
writing Employee’s post-employment obligations as set forth in this Agreement. 




 


5









 











	14.	 	Section 409A Notification. Employee acknowledges that Employee has been advised of
the American Jobs Creation Act of 2004, which added Section 409A to the Internal Revenue Code
(“Section 409A”), and significantly changed the taxation of nonqualified deferred
compensation plans and arrangements. Under proposed and final regulations as of the date of
this Agreement, Employee has been advised that Employee’s severance pay and other termination
benefits may be treated by the Internal Revenue Service as providing “nonqualified deferred
compensation,” and therefore subject to Section 409A. In that event, several provisions in
Section 409A may affect Employee’s receipt of severance compensation, including the timing
thereof. These include, but are not limited to, a provision which requires that distributions
to “specified employees” of public companies on account of separation from service may not be
made earlier than six (6) months after the effective date of such separation. If applicable,
failure to comply with Section 409A can lead to immediate taxation of such deferrals, with
interest calculated at a penalty rate and a 20% penalty. As a result of the requirements
imposed by the American Jobs Creation Act of 2004, Employee agrees if Employee is a “specified
employee” at the time of Employee’s termination of employment and if payments in connection with
such termination of employment are subject to Section 409A and not otherwise exempt, such
payments (and other benefits to the extent applicable) due Employee at the time of termination
of employment shall not be paid until a date at least six (6) months after the effective date of
Employee’s termination of employment (“Employee’s Effective Termination Date”). Notwithstanding
any provision of this Agreement to the contrary, to the extent that any payment under the terms
of this Agreement would constitute an impermissible acceleration of payments under Section 409A
or any regulations or Treasury guidance promulgated thereunder, such payments shall be made no
earlier than at such times allowed under Section 409A. If any provision of this Agreement (or
of any award of compensation) would cause Employee to incur any additional tax or interest under
Section 409A or any regulations or Treasury guidance promulgated thereunder, the Company or its
successor may reform such provision; provided that it will (i) maintain, to the maximum extent
practicable, the original intent of the applicable provision without violating the provisions of
Section 409A and (ii) notify and consult with Employee regarding such amendments or
modifications prior to the effective date of any such change.






	15.	 	Section 409A Acknowledgement. Employee acknowledges that, notwithstanding anything
contained herein to the contrary, both Parties shall be independently responsible for
accessing their own risks and liabilities under Section 409A that may be associated with any
payment made under the terms of this Agreement or any other arrangement which may be deemed to
trigger Section 409A. Further, the Parties agree that each shall independently bear
responsibility for any and all taxes, penalties or other tax obligations as may be imposed
upon them in their individual capacity as a matter of law. To the extent applicable, Employee
understands and agrees that Employee shall have the responsibility for, and Employee agrees to
pay, any and all appropriate income tax or other tax obligations for which Employee is
individually responsible and/or related to receipt of any benefits provided in this Agreement.
Employee agrees to fully indemnify and hold the Company harmless for any taxes, penalties,
interest, cost or attorneys’ fee assessed against or incurred by the Company on account of
such benefits having been provided to Employee or based on any alleged failure to withhold
taxes or satisfy any claimed obligation. Employee understands and acknowledges that neither
the Company, nor any of its employees, attorneys, or other representatives has provided or
will provide Employee with any legal or financial advice concerning taxes or any other matter,
and that Employee has not relied on any such advice in deciding whether to enter into this
Agreement.




 


6









 











	16.	 	Severance Payments. In the event Employee’s employment is terminated by the Company
without cause (including by Employee for Good Reason), and subject to the normal terms and
conditions imposed by the Company as set forth herein and in the attached Separation and
Release Agreement, Employee shall be eligible to receive severance pay based upon Employee’s
base salary at the time of termination for a period determined in accordance with any
guidelines as may be established by the Company or for a period up to twelve (12) months
(whichever is longer).






	17.	 	Severance Payment Terms and Conditions. No severance pay shall be paid if Employee
voluntarily leaves the Company’s employ without Good Reason, as defined above, or is
terminated for cause. Any severance pay made payable under this Agreement shall be paid in
lieu of, and not in addition to, any other contractual, notice or statutory pay or other
accrued compensation obligation (excluding accrued wages and deferred compensation).
Additionally, such severance pay is contingent upon Employee fully complying with the
restrictive covenants contained herein and executing a Separation and Release Agreement in a
form not substantially different from that attached as Exhibit A. Further, the Company’s
obligation to provide severance hereunder shall be deemed null and void should Employee fail
or refuse to execute and deliver to the Company the Company’s then-standard Separation and
Release Agreement (without modification) within any time period as may be prescribed by law
or, in absence thereof, twenty-one (21) days after the Employee’s Effective Termination Date.
Conditioned upon the execution and delivery of the Separation and Release Agreement as set
forth in the prior sentence, Severance pay benefits shall be paid as follows: (i) in one lump
sum equivalent to six (6) months’ salary on the day following the date which is six (6) months
following Employee’s Effective Termination Date with any remainder to be paid in bi-weekly
installments equivalent to the Employee’s salary commencing upon the next regularly scheduled
payroll date, if both the severance pay benefit is subject to Section 409A and if Employee is
a “specified employee” under Section 409A or (ii) for any severance pay benefits not subject
to clause (i), begin upon the next regularly scheduled payroll following the earlier to occur
of fifteen (15) days from the Company’s receipt of an executed Separation and Release
Agreement or the expiration of sixty (60) days after Employee’s Effective Termination Date and
shall be paid on the Company’s regularly scheduled pay dates; provided, however, that if the
before-stated sixty (60) day period ends in a calendar year following the calendar year in
which the sixty (60) day period commenced, then any benefits not subject to clause (i) shall
only begin on the next regularly scheduled payroll following the expiration of sixty (60) days
after the Employee’s Effective Termination Date. Excluding any lump sum payment due as a
result of the application of Section 409A (which shall be paid regardless of reemployment),
all other severance payments provided hereunder shall terminate upon reemployment.




 


7









 











	18.	 	Assignment of Rights.






	 	(a)	 	Copyrights. Employee agrees that all works of authorship fixed in any tangible
medium of expression by Employee during the term of this Agreement relating to the
Company’s business (“Works”), either solely or jointly with others, shall be and remain
exclusively the property of the Company. Each such Work created by Employee is a “work
made for hire” under the copyright law and the Company may file applications to register
copyright in such Works as author and copyright owner thereof. If, for any reason, a
Work created by Employee is excluded from the definition of a “work made for hire” under the
copyright law, then Employee does hereby assign, sell, and convey to the Company the entire
rights, title, and interests in and to such Work, including the copyright therein, to the
Company. Employee will execute any documents that the Company deems necessary in connection
with the assignment of such Work and copyright therein. Employee will take whatever steps
and do whatever acts the Company requests, including, but not limited to, placement of the
Company’s proper copyright notice on Works created by Employee to secure or aid in securing
copyright protection in such Works and will assist the Company or its nominees in filing
applications to register claims of copyright in such Works. The Company shall have free and
unlimited access at all times to all Works and all copies thereof and shall have the right
to claim and take possession on demand of such Works and copies.






	 	(b)	 	Inventions. Employee agrees that all discoveries, concepts, and ideas, whether
patentable or not, including, but not limited to, apparatus, processes, methods,
compositions of matter, techniques, and formulae, as well as improvements thereof or
know-how related thereto, relating to any present or prospective product, process, or
service of the Company (“Inventions”) that Employee conceives or makes during the term of
this Agreement relating to the Company’s business, shall become and remain the exclusive
property of the Company, whether patentable or not, and Employee will, without royalty or
any other consideration:






	 	(i)	 	Inform the Company promptly and fully of such Inventions by written reports,
setting forth in detail the procedures employed and the results achieved;






	 	(ii)	 	Assign to the Company all of Employee’s rights, title, and interests in and to
such Inventions, any applications for United States and foreign Letters Patent, any
United States and foreign Letters Patent, and any renewals thereof granted upon such
Inventions;






	 	(iii)	 	Assist the Company or its nominees, at the expense of the Company, to obtain
such United States and foreign Letters Patent for such Inventions as the Company may
elect; and






	 	(iv)	 	Execute, acknowledge, and deliver to the Company at the Company’s expense such
written documents and instruments, and do such other acts, such as giving testimony in
support of Employee’s inventorship, as may be necessary in the opinion of the Company,
to obtain and maintain United States and foreign Letters Patent upon such Inventions
and to vest the entire rights and title thereto in the Company and to confirm the
complete ownership by the Company of such Inventions, patent applications, and patents.






	19.	 	Company Property. All records, files, drawings, documents, data in whatever form,
business equipment (including computers, PDAs, cell phones, etc.), and the like relating to,
or provided by, the Company shall be and remain the sole property of the Company. Upon
termination of employment, Employee shall immediately return to the Company all such items
without retention of any copies and without additional request by the Company. De
minimis items such as pay stubs, 401(k) plan summaries, employee bulletins, and the like are
excluded from this requirement.




 


8









 











	20.	 	Confidential Information. Employee acknowledges that the Company and its affiliated
entities (herein collectively referred to as “Companies”) possess certain trade secrets as
well as other confidential and proprietary information which they have acquired or will
acquire at great effort and expense. Such information may include, without limitation,
confidential information, whether in tangible or intangible form, regarding the Companies’
products and services, marketing strategies, business plans, operations, costs, current or
prospective customer information (including customer identities, contacts, requirements,
creditworthiness, preferences, and like matters), product concepts, designs, prototypes or
specifications, research and development efforts, technical data and know-how, sales
information, including pricing and other terms and conditions of sale, financial information,
internal procedures, techniques, forecasts, methods, trade information, trade secrets,
software programs, project requirements, inventions, trademarks, trade names, and similar
information regarding the Companies’ business(es) (collectively referred to herein as
“Confidential Information”). Employee further acknowledges that, as a result of Employee’s
employment with the Company, Employee will have access to, will become acquainted with, and/or
may help develop, such Confidential Information. Confidential Information shall not include
information readily available in the public so long as such information was not made available
through fault of Employee or wrong doing by any other individual.






	21.	 	Restricted Use of Confidential Information. Employee agrees that all Confidential
Information is and shall remain the sole and exclusive property of the Company and/or its
affiliated entities. Except as may be expressly authorized by the Company in writing,
Employee agrees not to disclose, or cause any other person or entity to disclose, any
Confidential Information to any third party while employed by the Company and for as long
thereafter as such information remains confidential (or as limited by applicable law).
Further, Employee agrees to use such Confidential Information only in the course of Employee’s
duties in furtherance of the Company’s business and agrees not to make use of any such
Confidential Information for Employee’s own purposes or for the benefit of any other entity or
person.






	22.	 	Acknowledged Need for Limited Restrictive Covenants. Employee acknowledges that the
Companies have spent and will continue to expend substantial amounts of time, money and effort
to develop their business strategies, Confidential Information, customer identities and
relationships, goodwill and employee relationships, and that Employee will benefit from these
efforts. Further, Employee acknowledges the inevitable use of, or near-certain influence by
Employee’s knowledge of, the Confidential Information disclosed to Employee during the course
of employment if allowed to compete against the Company in an unrestricted manner and that
such use would be unfair and extremely detrimental to the Company. Accordingly, based on
these legitimate business reasons, Employee acknowledges each of the Companies’ need to
protect their legitimate business interests by reasonably restricting Employee’s ability to
compete with the Company on a limited basis.




 


9









 











	23.	 	Non-Solicitation. During Employee’s employment and for a period of eighteen (18)
months thereafter, Employee agrees not to directly or indirectly engage in the following
prohibited conduct:






	 	(a)	 	Solicit, offer products or services to, or accept orders for, any Competitive Products
or otherwise transact any competitive business with, any customer or entity with whom
Employee had contact or transacted any business on behalf of the Company (or any Affiliate
thereof) during the eighteen (18) month period preceding Employee’s date of separation or
about whom Employee possessed, or had access to, confidential and proprietary information;






	 	(b)	 	Attempt to entice or otherwise cause any third party to withdraw, curtail or cease
doing business with the Company (or any Affiliate thereof), specifically including
customers, vendors, independent contractors and other third party entities;






	 	(c)	 	Disclose to any person or entity the identities, contacts or preferences of any
customers of the Company (or any Affiliate thereof), or the identity of any other persons
or entities having business dealings with the Company (or any Affiliate thereof);






	 	(d)	 	Induce any individual who has been employed by or had provided services to the Company
(or any Affiliate thereof) within the six (6) month period immediately preceding the
effective date of Employee’s separation to terminate such relationship with the Company (or
any Affiliate thereof);






	 	(e)	 	Assist, coordinate or otherwise offer employment to, accept employment inquiries from,
or employ any individual who is or had been employed by the Company (or any Affiliate
thereof) at any time within the six (6) month period immediately preceding such offer, or
inquiry;






	 	(f)	 	Communicate or indicate in any way to any customer of the Company (or any Affiliate
thereof), prior to formal separation from the Company, any interest, desire, plan, or
decision to separate from the Company; or






	 	(g)	 	Otherwise attempt to directly or indirectly interfere with the Company’s business, the
business of any of the Companies or their relationship with their employees, consultants,
independent contractors or customers.






	24.	 	Limited Non-Compete. For the above-stated reasons, and as a condition of employment
to the fullest extent permitted by law, Employee agrees during the Relevant Non-Compete Period
not to directly or indirectly engage in the following competitive activities:






	 	(a)	 	Employee shall not have any ownership interest in, work for, advise, consult, or have
any business connection or business or employment relationship in any competitive capacity
with any Competitor unless Employee provides written notice to the Company of such
relationship prior to entering into such relationship and, further, provides sufficient
written assurances to the Company’s satisfaction that such relationship will not,
jeopardize the Company’s legitimate interests or otherwise violate the terms of this
Agreement;





 


10









 






	 	(b)	 	Employee shall not engage in any research, development, production, sale or
distribution of any Competitive Products, specifically including any products or services
relating to those for which Employee had responsibility for the eighteen (18) month period
preceding Employee’s date of separation;







	 	(c)	 	Employee shall not market, sell, or otherwise offer or provide any Competitive Products
within Employee’s Geographic Territory (if applicable) or Assigned Customer Base,
specifically including any products or services relating to those for which Employee had
responsibility for the eighteen (18) month period preceding Employee’s date of separation;
and






	 	(d)	 	Employee shall not distribute, market, sell or otherwise offer or provide any
Competitive Products to any customer of the Company with whom Employee had contact or for
which Employee had responsibility at any time during the eighteen (18) month period
preceding Employee’s date of separation.






	25.	 	Non-Compete Definitions. For purposes of this Agreement, the Parties agree that the
following terms shall apply:






	 	(a)	 	“Affiliate” includes any parent, subsidiary, joint venture, or other entity controlled,
owned, managed or otherwise associated with the Company;






	 	(b)	 	“Assigned Customer Base” shall include all accounts or customers formally assigned to
Employee within a given territory or geographical area or contacted by Employee at any time
during the eighteen (18) month period preceding Employee’s date of separation;






	 	(c)	 	“Competitive Products” shall include any product or service that directly or indirectly
competes with, is substantially similar to, or serves as a reasonable substitute for, any
product or service in research, development or design, or manufactured, produced, sold or
distributed by the Company;






	 	(d)	 	“Competitor” shall include any person or entity that offers or is actively planning to
offer any Competitive Products and may include (but not be limited to) any entity
identified on the Company’s Illustrative Competitor List, attached hereto as Exhibit B,
which shall be amended from time to time to reflect changes in the Company’s business and
competitive environment (updated competitor lists will be provided to Employee upon
reasonable request);






	 	(e)	 	“Geographic Territory” shall include any territory formally assigned to Employee as
well as all territories in which Employee has provided any services, sold any products or
otherwise had responsibility at any time during the eighteen (18) month period preceding
Employee’s date of separation;




 


11









 











	 	(f)	 	“Relevant Non-Compete Period” shall include the period of Employee’s employment with
the Company as well as a period of eighteen (18) months after such employment is
terminated, regardless of the reason for such termination provided, however, that this
period shall be reduced to the greater of (i) nine (9) months or (ii) the total length of
Employee’s employment with the Company, including employment with any parent, subsidiary or
affiliated entity, if such employment is less than eighteen (18) months;






	 	(g)	 	“Directly or indirectly” shall be construed such that the foregoing restrictions shall
apply equally to Employee whether performed individually or as a partner, shareholder,
officer, director, manager, employee, salesman, independent contractor, broker, agent, or
consultant for any other individual, partnership, firm, corporation, company, or other
entity engaged in such conduct.






	26.	 	Consent to Reasonableness. In light of the above-referenced concerns, including
Employee’s knowledge of and access to the Companies’ Confidential Information, Employee
acknowledges that the terms of the foregoing restrictive covenants are reasonable and
necessary to protect the Company’s legitimate business interests and will not unreasonably
interfere with Employee’s ability to obtain alternate employment. As such, Employee hereby
agrees that such restrictions are valid and enforceable, and affirmatively waives any argument
or defense to the contrary. Employee acknowledges that this limited non-competition provision
is not an attempt to prevent Employee from obtaining other employment in violation of IC
§22-5-3-1 or any other similar statute. Employee further acknowledges that the Company may
need to take action, including litigation, to enforce this limited non-competition provision,
which efforts the Parties stipulate shall not be deemed an attempt to prevent Employee from
obtaining other employment.






	27.	 	Survival of Restrictive Covenants. Employee acknowledges that the above restrictive
covenants shall survive the termination of this Agreement and the termination of Employee’s
employment for any reason. Employee further acknowledges that any alleged breach by the
Company of any contractual, statutory or other obligation shall not excuse or terminate the
obligations hereunder or otherwise preclude the Company from seeking injunctive or other
relief. Rather, Employee acknowledges that such obligations are independent and separate
covenants undertaken by Employee for the benefit of the Company.






	28.	 	Effect of Transfer. Subject to the provisions of Paragraph 11 above, Employee agrees
that this Agreement shall continue in full force and effect notwithstanding any change in job
duties, job titles or reporting responsibilities. Employee further acknowledges that the
above restrictive covenants shall survive, and be extended to cover, the transfer of Employee
from the Company to its parent, subsidiary, or any other affiliated entity (hereinafter
collectively referred to as an “Affiliate”) or any subsequent transfer(s) among them.
Specifically, in the event of Employee’s temporary or permanent transfer to an Affiliate,
Employee agrees that the foregoing restrictive covenants shall remain in force so as to
continue to protect such company for the duration of the non-compete period, measured from
Employee’s effective date of transfer to an Affiliate. Additionally, Employee acknowledges
that this Agreement shall be deemed to have been automatically assigned to the Affiliate as of
Employee’s effective date of transfer such that the above-referenced restrictive covenants (as
well as all other terms and conditions contained herein) shall be construed thereafter to
protect the legitimate business interests and goodwill of the Affiliate as if Employee and the
Affiliate had independently entered into this Agreement. Employee’s acceptance of Employee’s
transfer to, and subsequent employment by, the Affiliate shall serve as consideration for (as
well as be deemed as evidence of Employee’s consent to) the assignment of this Agreement
to the Affiliate as well as the extension of such restrictive covenants to the Affiliate.
Employee agrees that this provision shall apply with equal force to any subsequent transfers of
Employee from one Affiliate to another Affiliate.




 


12









 











	29.	 	Post-Termination Notification. For the duration of Employee’s Relevant Non-compete
Period or other restrictive covenant period, which ever is longer, Employee agrees to promptly
notify the Company no later than five (5) business days of Employee’s acceptance of any
employment or consulting engagement. Such notice shall include sufficient information to
ensure Employee compliance with Employee’s non-compete obligations and must include at a
minimum the following information: (i) the name of the employer or entity for which Employee
is providing any consulting services; (ii) a description of Employee’s intended duties as well
as (iii) the anticipated start date. Such information is required to ensure Employee’s
compliance with Employee’s non-compete obligations as well as all other applicable restrictive
covenants. Such notice shall be provided in writing to the Office of Vice President and
General Counsel of the Company at 1069 State Road 46 E, Batesville, Indiana 47006. Failure to
timely provide such notice shall be deemed a material breach of this Agreement and entitle the
Company to return of any severance paid to Employee plus attorneys’ fees. Employee further
consents to the Company’s notification to any new employer of Employee’s rights and
obligations under this Agreement.






	30.	 	Scope of Restrictions. If the scope of any restriction contained in any preceding
paragraphs of this Agreement is deemed too broad to permit enforcement of such restriction to
its fullest extent, then such restriction shall be enforced to the maximum extent permitted by
law, and Employee hereby consents and agrees that such scope may be judicially modified
accordingly in any proceeding brought to enforce such restriction.






	31.	 	Specific Enforcement/Injunctive Relief. Employee agrees that it would be difficult
to measure any damages to the Company from a breach of the above-referenced restrictive
covenants, but acknowledges that the potential for such damages would be great, incalculable
and irremediable, and that monetary damages alone would be an inadequate remedy. Accordingly,
Employee agrees that the Company shall be entitled to immediate injunctive relief against such
breach, or threatened breach, in any court having jurisdiction. In addition, if Employee
violates any such restrictive covenant, Employee agrees that the period of such violation
shall be added to the term of the restriction. In determining the period of any violation,
the Parties stipulate that in any calendar month in which Employee engages in any activity in
violation of such provisions, Employee shall be deemed to have violated such provision for the
entire month, and that month shall be added to the duration of the non-competition provision.
Employee acknowledges that the remedies described above shall not be the exclusive remedies,
and the Company may seek any other remedy available to it either in law or in equity,
including, by way of example only, statutory remedies for misappropriation of trade secrets,
and including the recovery of compensatory or punitive damages. Employee further agrees that
the Company shall be entitled to an award of all costs and attorneys’ fees incurred by it in
any attempt to enforce the terms of this Agreement.






	32.	 	Publicly Traded Stock. The Parties agree that nothing contained in this Agreement
shall be construed to prohibit Employee from investing Employee’s personal assets in any stock
or corporate security traded or quoted on a national securities exchange or national market
system provided, however, such investments do not require any services on the part of Employee
in the operation or the affairs of the business or otherwise violate the Company’s Code of
Ethics.




 


13









 











	33.	 	Notice of Claim and Contractual Limitations Period. Employee acknowledges the
Company’s need for prompt notice, investigation, and resolution of any claims that may be
filed against it due to the number of relationships it has with employees and others (and due
to the turnover among such individuals with knowledge relevant to any underlying claim).
Accordingly, Employee agrees prior to initiating any litigation of any type (including, but
not limited to, employment discrimination litigation, wage litigation, defamation, or any
other claim) to notify the Company, within One Hundred and Eighty (180) days after the claim
accrued, by sending a certified letter addressed to the Company’s General Counsel setting
forth: (i) claimant’s name, address, and phone; (ii) the name of any attorney (if any)
representing Employee; (iii) the nature of the claim; (iv) the date the claim arose; and (v)
the relief requested. This provision is in addition to any other notice and exhaustion
requirements that might apply. For any dispute or claim of any type against the Company
(including but not limited to employment discrimination litigation, wage litigation,
defamation, or any other claim), Employee must commence legal action within the shorter of one
(1) year of accrual of the cause of action or such shorter period that may be specified by
law.






	34.	 	Non-Jury Trials. Notwithstanding any right to a jury trial for any claims, Employee
waives any such right to a jury trial, and agrees that any claim of any type (including but
not limited to employment discrimination litigation, wage litigation, defamation, or any other
claim) lodged in any court will be tried, if at all, without a jury.






	35.	 	Choice of Forum. Employee acknowledges that the Company is primarily based in
Indiana, and Employee understands and acknowledges the Company’s desire and need to defend any
litigation against it in Indiana. Accordingly, the Parties agree that any claim of any type
brought by Employee against the Company or any of its employees or agents must be maintained
only in a court sitting in Marion County, Indiana, or Ripley County, Indiana, or, if a federal
court, the Southern District of Indiana, Indianapolis Division. Employee further understands
and acknowledges that in the event the Company initiates litigation against Employee, the
Company may need to prosecute such litigation in such state where the Employee is subject to
personal jurisdiction. Accordingly, for purposes of enforcement of this Agreement, Employee
specifically consents to personal jurisdiction in the State of Indiana as well as any state in
which resides a customer assigned to the Employee. Furthermore, Employee consents to appear,
upon Company’s request and at Employee’s own cost, for deposition, hearing, trial, or other
court proceeding in Indiana or in any state in which resides a customer assigned to the
Employee.






	36.	 	Choice of Law. This Agreement shall be deemed to have been made within the County of
Ripley, State of Indiana and shall be interpreted and construed in accordance with the laws of
the State of Indiana. Any and all matters of dispute of any nature whatsoever arising out of,
or in any way connected with the interpretation of this Agreement, any disputes arising out of
the Agreement or the employment relationship between the Parties hereto, shall be governed
by, construed by and enforced in accordance with the laws of the State of Indiana without regard
to any applicable state’s choice of law provisions.




 


14









 











	37.	 	Titles. Titles are used for the purpose of convenience in this Agreement and shall
be ignored in any construction of it.






	38.	 	Severability. The Parties agree that each and every paragraph, sentence, clause,
term and provision of this Agreement is severable and that, in the event any portion of this
Agreement is adjudged to be invalid or unenforceable, the remaining portions thereof shall
remain in effect and be enforced to the fullest extent permitted by law. Further, should any
particular clause, covenant, or provision of this Agreement be held unreasonable or contrary
to public policy for any reason, the Parties acknowledge and agree that such covenant,
provision or clause shall automatically be deemed modified such that the contested covenant,
provision or clause will have the closest effect permitted by applicable law to the original
form and shall be given effect and enforced as so modified to whatever extent would be
reasonable and enforceable under applicable law.






	39.	 	Assignment-Notices. The rights and obligations of the Company under this Agreement
shall inure to its benefit, as well as the benefit of its parent, subsidiary, successor and
affiliated entities, and shall be binding upon the successors and assigns of the Company.
This Agreement, being personal to Employee, cannot be assigned by Employee, but Employee’s
personal representative shall be bound by all its terms and conditions. Any notice required
hereunder shall be sufficient if in writing and mailed to the last known residence of Employee
or to the Company at its principal office with a copy mailed to the Office of the General
Counsel.






	40.	 	Amendments and Modifications. Except as specifically provided herein, no
modification, amendment, extension or waiver of this Agreement or any provision hereof shall
be binding upon the Company or Employee unless in writing and signed by both Parties. The
waiver by the Company or Employee of a breach of any provision of this Agreement shall not be
construed as a waiver of any subsequent breach. Nothing in this Agreement shall be construed
as a limitation upon the Company’s right to modify or amend any of its manuals or policies in
its sole discretion and any such modification or amendment which pertains to matters addressed
herein shall be deemed to be incorporated herein and made a part of this Agreement.






	41.	 	Outside Representations. Employee represents and acknowledges that in signing this
Agreement Employee does not rely, and has not relied, upon any representation or statement
made by the Company or by any of the Company’s employees, officers, agents, stockholders,
directors or attorneys with regard to the subject matter, basis or effect of this Agreement
other than those specifically contained herein.






	42.	 	Voluntary and Knowing Execution. Employee acknowledges that Employee has been
offered a reasonable amount of time within which to consider and review this Agreement; that
Employee has carefully read and fully understands all of the provisions of this Agreement; and
that Employee has entered into this Agreement knowingly and voluntarily.




 


15









 











	43.	 	Entire Agreement. This Agreement constitutes the entire employment agreement between
the Parties hereto concerning the subject matter hereof and shall supersede all prior and
contemporaneous agreements between the Parties in connection with the subject matter of this
Agreement. Any pre-existing Employment Agreements shall be deemed null and void. Nothing in
this Agreement, however, shall affect any separately-executed written agreement addressing any
other issues (e. g., the Inventions, Improvements, Copyrights and Trade Secrets Agreement,
etc.).





IN WITNESS WHEREOF, the Parties have signed this Agreement effective as of the day and year
first above written.



	 	 	 	 	 
	“EMPLOYEE”

	 	Hill-Rom Holdings, Inc.	 	 
	 
	 	 	 	 
	Signed: /s/ Earl V. DeCarli

	 	By: /s/ John H. Dickey	 	 
	 


	 	 


	 	 
	Printed: Earl V. DeCarli

	 	Title: Senior Vice President Human Resources	 	 
	 


	 	 


	 	 
	Dated: July 31, 2008

	 	Dated: August 4, 2008	 	 
	 


	 	 


	 	 






CAUTION: READ BEFORE SIGNING



 


16









 





Exhibit A




SAMPLE SEPARATION AND RELEASE AGREEMENT




THIS SEPARATION and RELEASE AGREEMENT (“Agreement”) is entered into by and between Earl
DeCarli (“Employee”) and Hill-Rom Holdings, Inc. (together with its subsidiaries and affiliates,
the “Company”). To wit, the Parties agree as follows:




	1.	 	Employee’s active employment by the Company shall terminate effective [date of termination]
(Employee’s “Effective Termination Date”). Except as specifically provided by this Agreement,
Employee’s Employment Agreement, any Change in Control Agreement and any Indemnity Agreement
that may exist between the Company and Employee, Employee agrees that the Company shall have
no other obligations or liabilities to [him/her] following [his/her] Effective Termination
Date and that [his/her] receipt of the Severance Benefits provided herein shall constitute a
complete settlement, satisfaction and waiver of any and all claims [he/she] may have against
the Company.






	2.	 	Employee further submits, and the Company hereby accepts, his resignation as an employee,
officer and director, as of his Effective Termination Date for any position he may hold. The
Parties agree that this resignation shall apply to all such positions Employee may hold with
the Company or any parent, subsidiary or affiliated entity thereof. Employee agrees to
execute any documents needed to effectuate such resignation. Employee further agrees to take
whatever steps are necessary to facilitate and ensure the smooth transition of his duties and
responsibilities to others.






	3.	 	Employee acknowledges that he/she has been advised of the American Jobs Creation Act of 2004,
which added Section 409A (“Section 409A”) to the Internal Revenue Code, and significantly
changed the taxation of nonqualified deferred compensation plans and arrangements. Under
proposed and final regulations as of the date of this Agreement, Employee has been advised
that his/her severance pay may be treated by the Internal Revenue Service as providing
“nonqualified deferred compensation,” and therefore subject to Section 409A. In that event,
several provisions in Section 409A may affect Employee’s receipt of severance compensation.
These include, but are not limited to, a provision which requires that distributions to
“specified employees” of public companies on account of separation from service may not be
made earlier than six (6) months after the effective date of such separation. If applicable,
failure to comply with Section 409A can lead to immediate taxation of deferrals, with interest
calculated at a penalty rate and a 20% penalty. As a result of the requirements imposed by
the American Jobs Creation Act of 2004, Employee agrees if he/she is a “specified employee” at
the time of his/her termination of employment and if severance payments are covered as
“non-qualified deferred compensation” or otherwise not exempt, the severance pay benefits
shall not be paid until a date at least six (6) months after Employee’s Effective Termination
Date from Company, as more fully explained by Paragraph 4, below.




 


 









 











	4.	 	In consideration of the promises contained in this Agreement and contingent upon Employee’s
compliance with such promises, the Company agrees to provide Employee the following:






	 	(a)	 	Severance pay, in lieu of, and not in addition to any other contractual, notice or
statutory pay obligations (other than accrued wages and deferred compensation) in the
maximum total amount of [Insert Amount] Dollars and [             ] Cents ($                    ), less
applicable deductions or other set offs, payable as follows:






[For 409A Severance Pay for Specified Employees Only]




	 	(i)	 	A lump payment in the gross amount of [insert amount equal to 6 months’ pay]
Dollars and 
 _____ 

Cents 
($
                    ) payable the day following the sixth (6tth)
month anniversary of Employee’s Effective Termination Date, with any remaining amount
to be paid in bi-weekly installments equivalent to Employee’s base salary (i.e.
                     Dollars and                       Cents ($                    ), less applicable deductions or
other setoffs, commencing upon the next regularly scheduled payroll date after the
payment of the lump sum for a period of up to                      weeks or until the Employee
becomes reemployed, whichever comes first.






[For Non-409A Severance Pay or 409A Severance Pay for Non-Specified Employees Only]




	 	(i)	 	Commencing on the next regularly scheduled payroll immediately following the
earlier to occur of fifteen (15) days from the Company’s receipt of an executed
Separation and Release Agreement or the expiration of sixty (60) days after Employee’s
Effective Termination Date, Employee shall be paid severance equivalent to [his/her]
bi-weekly base salary (i.e.                      Dollars and                     


Cents ($                    ),
less applicable deductions or other set-offs), for a period up to [insert weeks] (_____)
weeks following Employee’s Effective Termination Date or until Employee becomes
reemployed, whichever occurs first; provided, however, that if the before-stated sixty
(60) day period ends in a calendar year following the calendar year in which the sixty
(60) day period commenced, then this severance pay shall only begin on the next
regularly scheduled payroll following the expiration of sixty (60) days after the
Employee’s Effective Termination Date.






	 	(b)	 	Payment for any earned but unused vacation as of Employee’s Effective Termination Date,
less applicable deductions permitted or required by law, payable in one lump sum within
fifteen (15) days after the Employee’s Effective Termination Date; and
	 
	 	(c)	 	Group Life Insurance coverage until the above-referenced Severance Pay terminates.






	5.	 	Except as may be required by Section 409A, the above Severance Pay shall be paid in
accordance with the Company’s standard payroll practices (e.g. bi-weekly). The Parties agree
that the initial two (2) weeks of the foregoing Severance Pay shall be allocated as
consideration provided to Employee in exchange for his/her execution of a release in
compliance with the Older Workers Benefit Protection Act. The balance of the severance
benefits and other obligations undertaken by the Company pursuant to this Agreement shall
be allocated as consideration for all other promises and obligations undertaken by Employee,
including execution of a general release of claims.




 


2









 











	6.	 	The Company further agrees to provide Employee with limited out-placement counseling with a
company of its choice provided that Employee participates in such counseling immediately
following termination of employment. Notwithstanding anything in this Section 6 to the
contrary, the out-placement counseling shall not be provided after the last day of the second
calendar year following the calendar year in which termination of employment occurs.






	7.	 	As of [his/her] Effective Termination Date, Employee will become ineligible to participate in
the Company’s health insurance program and continuation of coverage requirements under COBRA
(if any) will be triggered at that time. However, as additional consideration for the
promises and obligations contained herein (and except as may be prohibited by law), the
Company agrees to continue to pay the employer’s share of such coverage as provided under the
health care program selected by Employee as of [his/her] Effective Termination Date, subject
to any approved changes in coverage based on a qualified election, until the above-referenced
Severance Pay terminates, Employee accepts other employment or Employee becomes eligible for
alternative healthcare coverage, which ever comes first, provided Employee (i) timely
completes the applicable election of coverage forms and (ii) continues to pay the employee
portion of the applicable premium(s). Thereafter, if applicable, coverage will be made
available to Employee at [his/her] sole expense (i.e., Employee will be responsible
for the full COBRA premium) for the remaining months of the COBRA coverage period made
available pursuant to applicable law. In the event Employee is deemed to be a highly
compensated employee under applicable law, Employee acknowledges that the value of the
benefits provided hereunder may be subject to taxation. The medical insurance provided herein
does not include any disability coverage.






	8.	 	Should Employee become employed before the above-referenced Severance Benefits are exhausted
or terminated, Employee agrees to so notify the Company in writing within five (5) business
days of Employee’s acceptance of such employment, providing the name of such employer (or
entity to whom Employee may be providing consulting services), [his/her] intended duties as
well as the anticipated start date. Such information is required to ensure Employee’s
compliance with [his/her] non-compete obligations as well as all other applicable restrictive
covenants. This notice will also serve to trigger the Company’s right to terminate the
above-referenced severance pay benefits (specifically excluding any lump sum payment due as a
result of the application of Section 409A) as well as all Company-paid or Company—provided
benefits consistent with the above paragraphs. Failure to timely provide such notice shall be
deemed a material breach of this Agreement entitling the Company to recover as damages the
value of all benefits provided to Employee hereunder plus attorneys fees.






	9.	 	Employee agrees to fully indemnify and hold the Company harmless for any taxes, penalties,
interest, cost or attorneys’ fee assessed against or incurred by the Company on account of
such benefits having been provided to [him/her] or based on any alleged failure to withhold
taxes or satisfy any claimed obligation. Employee understands and acknowledges that neither
the Company, nor any of its employees, attorneys, or other representatives has provided
[him/her] with any legal or financial advice concerning taxes or any other matter,
and that [he/she] has not relied on any such advice in deciding whether to enter into this
Agreement. To the extent applicable, Employee understands and agrees that [he/she] shall have
the responsibility for, and [he/she] agrees to pay, any and all appropriate income tax or other
tax obligations for which [he/she] is individually responsible and/or related to receipt of any
benefits provided in this Agreement not subject to federal withholding obligations.




 


3









 











	10.	 	In exchange for the foregoing Severance Benefits, [EMPLOYEE’S FULL NAME] on behalf of
[himself/herself], [his/her] heirs, representatives, agents and assigns hereby RELEASES,
INDEMNIFIES, HOLDS HARMLESS, and FOREVER DISCHARGES (i) [Company Legal Name], employees,
shareholders, and agents, as well as, (iv) all predecessors, successors and assigns thereof
from any and all actions, charges, claims, demands, damages or liabilities of any kind or
character whatsoever, known or unknown, which Employee now has or may have had through the
effective date of this Agreement.






	11.	 	Without limiting the generality of the foregoing release, it shall include: (i) all claims
or potential claims arising under any federal, state or local laws relating to the Parties’
employment relationship, including any claims Employee may have under the Civil Rights Acts of
1866, 1964 and 1991, as amended, 42 U.S.C. §§ 1981 and 2000(e) et seq.; the
Age Discrimination in Employment Act, as amended, 29 U.S.C. §§ 621 et seq.;
the Americans with Disabilities Act of 1990, as amended, 42 U.S.C §§ 12,101 et
seq.; the Fair Labor Standards Act 29 U.S.C. §§ 201 et seq.; the
Worker Adjustment and Retraining Notification Act, 29 U.S.C. §§ 2101, et seq.;
the Sarbanes-Oxley Act of 2002, specifically including the Corporate and Criminal Fraud
Accountability Act, 18 USC §1514A et seq.; and any other federal, state or
local law governing the Parties’ employment relationship; (ii) any claims on account of,
arising out of or in any way connected with Employee’s employment with the Company or leaving
of that employment; (iii) any claims alleged or which could have been alleged in any charge or
complaint against the Company; (iv) any claims relating to the conduct of any employee,
officer, director, agent or other representative of the Company; (v) any claims of
discrimination, harassment or retaliation on any basis; (vi) any claims arising from any legal
restrictions on an employer’s right to separate its employees; (vii) any claims for personal
injury, compensatory or punitive damages or other forms of relief; and (viii) all other causes
of action sounding in contract, tort or other common law basis, including (a) the breach of
any alleged oral or written contract, (b) negligent or intentional misrepresentations, (c)
wrongful discharge, (d) just cause dismissal, (e) defamation, (f) interference with contract
or business relationship or (g) negligent or intentional infliction of emotional distress.






	12.	 	Employee further agrees and covenants not to sue the Company or any entity or individual
subject to the foregoing General Release with respect to any claims, demands, liabilities or
obligations release by this Agreement provided, however, that nothing contained in this
Agreement shall:






	 	(a)	 	prevent Employee from filing an administrative charge with the Equal Employment
Opportunity Commission or any other federal, state or local agency; or






	 	(b)	 	prevent employee from challenging, under the Older Worker’s Benefit Protection Act (29
U.S.C. § 626), the knowing and voluntary nature of his/her release of any age claims in
this Agreement in court or before the Equal Employment Opportunity Commission. [INCLUDE
THIS SUBPARAGRAPH (b) IF EMPLOYEE IS AGE 40 OR OLDER]




 


4









 











	13.	 	Notwithstanding his right to file an administrative charge with the EEOC or any other
federal, state, or local agency, Employee agrees that with his release of claims in this
Agreement, he has waived any right he may have to recover monetary or other personal relief in
any proceeding based in whole or in part on claims released by him in this Agreement. For
example, Employee waives any right to monetary damages or reinstatement if an administrative
charge is brought against the Company whether by Employee, the EEOC, or any other person or
entity, including but not limited to any federal, state, or local agency. Further, with his
release of claims in this Agreement, Employee specifically assigns to the Company his right to
any recovery arising from any such proceeding.






	14.	 	[INCLUDE THIS LANGUAGE IF THE EMPLOYEE IS AGE 40 OR OLDER] The Parties acknowledge that it is
their mutual and specific intent that the above waiver fully complies with the requirements of
the Older Workers Benefit Protection Act (29 U.S.C. § 626) and any similar law governing
release of claims. Accordingly, Employee hereby acknowledges that:






	 	(a)	 	[He/She] has carefully read and fully understands all of the provisions of this
Agreement and that [he/she] has entered into this Agreement knowingly and voluntarily;






	 	(b)	 	The Severance Benefits offered in exchange for Employee’s release of claims exceed in
kind and scope that to which [he/she] would have otherwise been legally entitled absent the
execution of this Agreement;






	 	(c)	 	Prior to signing this Agreement, Employee had been advised, and is being advised by
this Agreement, to consult with an attorney of [his/her] choice concerning its terms and
conditions; and






	 	(d)	 	[He/She] has been offered at least [twenty-one (21)/forty-five (45)] days within which
to review and consider this Agreement.






	15.	 	[ADD THIS LANGUAGE IF THE EMPLOYEE IS AGE 40 OR OLDER] The Parties agree that this Agreement
shall not become effective and enforceable until the date this Agreement is signed by both
Parties or seven (7) calendar days after its execution by Employee, whichever is later.
Employee may revoke this Agreement for any reason by providing written notice of such intent
to the Company within seven (7) days after [he/she] has signed this Agreement, thereby
forfeiting Employee’s right to receive any Severance Benefits provided hereunder and rendering
this Agreement null and void in its entirety. This revocation must be sent to the Employee’s
HR representative with a copy sent to the Company Office of General Counsel and must be
received by the end of the seventh day after the Employee signs this Agreement to be
effective.




 


5









 











	16.	 	[ADD THIS LANGUAGE IF THE EMPLOYEE IS IN CALIFORNIA] Employee specifically acknowledges
that, as a condition of this Agreement, he/she expressly releases all rights and claims that
he/she knows about as well as those he/she may not
know about. Employee expressly waives all rights under Section 1542 of the Civil Code of the
State of California, which reads as follows:






“A general release does not extend to claims which the creditor does not know or
suspect to exist in his/her favor at the time of executing the release which if
known, must have materially affected his/her settlement with the debtor.”




Notwithstanding the provision by Section 1542, and for the purpose of implementing a full and
complete release and discharge of the Company as set forth above, Employee expressly
acknowledges that this Agreement is intended to include and does in its effect, without
limitation, include all claims which Employee does not know or suspect to exist in his/her favor
at the time of signing this Agreement and that this Agreement expressly contemplates the
extinguishment of all such claims.




	17.	 	The Parties agree that nothing contained herein shall purport to waive or otherwise affect
any of Employee’s rights or claims that may arise after [he/she] signs this Agreement. It is
further understood by the Parties that nothing in this Agreement shall affect any rights
Employee may have under any Company sponsored Deferred Compensation Program, Executive Life
Insurance Bonus Plan, Stock Grant Award, Stock Option Grant, Restricted Stock Unit Award,
Pension Plan and/or Savings Plan (i.e., 401(k) plan) provided by the Company as of the
date of [his/her] termination, such items to be governed exclusively by the terms of the
applicable agreements or plan documents.






	18.	 	Similarly, notwithstanding any provision contained herein to the contrary, this Agreement
shall not constitute a waiver or release or otherwise affect Employee’s rights with respect to
any vested benefits, any rights [he/she] has to benefits which can not be waived by law, any
coverage provided under any Directors and Officers (“D&O”) policy, any rights Employee may
have under any indemnification agreement [he/she] has with the Company prior to the date
hereof, any rights he/she has as a shareholder, or any claim for breach of this Agreement,
including, but not limited to the benefits promised by the terms of this Agreement.






	19.	 	[Optional Provision for Equity Eligible Employees: Except as provided herein, Employee
acknowledges that [he/she] will not be eligible to receive or vest in any additional stock
options, stock awards or restricted stock units (“RSUs”) as of [his/her] Effective Termination
Date. Failure to exercise any vested options within the applicable period as set for in the
plan and/or grant will result in their forfeiture. Employee acknowledges that any stock
options, stock awards or RSUs held for less than the required period shall be deemed forfeited
as of the effective date of this Agreement. All terms and conditions of such stock options,
stock awards or RSUs shall not be affected by this Agreement, shall remain in full force and
effect, and shall govern the Parties’ rights with respect to such equity based awards.]





 


6









 






	20.	 	[Option A] Employee acknowledges that [his/her] termination and the Severance Benefits
offered hereunder were based on an individual determination and were not offered in
conjunction with any group termination or group severance program and waives any claim to the
contrary.






[Option B] Employee represents and agrees that [he/she] has been provided relevant cohort
information based on the information available to the Company as of the date this Agreement was
tendered to Employee. This information is attached hereto as Exhibit A. The Parties
acknowledge that simply providing such information does not mean and should not be interpreted
to mean that the Company was obligated to comply with 29 C.F.R. § 1625.22(f).




	21.	 	Employee hereby affirms and acknowledges [his/her] continued obligations to comply with the
post-termination covenants contained in [his/her] Employment Agreement, including but not
limited to, the non-compete, trade secret and confidentiality provisions. Employee
acknowledges that a copy of the Employment Agreement has been attached to this Agreement as
Exhibit [A/B] or has otherwise been provided to [him/her] and, to the extent not inconsistent
with the terms of this Agreement or applicable law, the terms thereof shall be incorporated
herein by reference. Employee acknowledges that the restrictions contained therein are valid
and reasonable in every respect and are necessary to protect the Company’s legitimate business
interests. Employee hereby affirmatively waives any claim or defense to the contrary.
Employee hereby acknowledges that the definition of Competitor, as provided in [his/her]
Employment Agreement shall include but not be limited to those entities specifically
identified in the updated Competitor List, attached hereto as Exhibit [B/C].






	22.	 	Employee acknowledges that the Company as well as its parent, subsidiary and affiliated
companies (“Companies” herein) possess, and [he/she] has been granted access to, certain trade
secrets as well as other confidential and proprietary information that they have acquired at
great effort and expense. Such information includes, without limitation, confidential
information regarding products and services, marketing strategies, business plans, operations,
costs, current or, prospective customer information (including customer contacts,
requirements, creditworthiness and like matters), product concepts, designs, prototypes or
specifications, regulatory compliance issues, research and development efforts, technical data
and know-how, sales information, including pricing and other terms and conditions of sale,
financial information, internal procedures, techniques, forecasts, methods, trade information,
trade secrets, software programs, project requirements, inventions, trademarks, trade names,
and similar information regarding the Companies’ business (collectively referred to herein as
“Confidential Information”).






	23.	 	Employee agrees that all such Confidential Information is and shall remain the sole and
exclusive property of the Company. Except as may be expressly authorized by the Company in
writing, or as may be required by law after providing due notice thereof to the Company,
Employee agrees not to disclose, or cause any other person or entity to disclose, any
Confidential Information to any third party for as long thereafter as such information remains
confidential (or as limited by applicable law) and agrees not to make use of any such
Confidential Information for Employee’s own purposes or for the benefit of any other entity or
person. The Parties acknowledge that Confidential Information shall not include any
information that is otherwise made public through no fault of Employee or other wrong doing.




 


7









 











	24.	 	On or before Employee’s Effective Termination Date or per the Company’s request, Employee
agrees to return the original and all copies of all things in [his/her] possession or control
relating to the Company or its business, including but not limited to any and all contracts,
reports, memoranda, correspondence, manuals, forms, records, designs, budgets, contact
information or lists (including customer, vendor or supplier lists), ledger sheets or other
financial information, drawings, plans (including, but not limited to, business, marketing and
strategic plans), personnel or other business files, computer hardware, software, or access
codes, door and file keys, identification, credit cards, pager, phone, and any and all other
physical, intellectual, or personal property of any nature that [he/she] received, prepared,
helped prepare, or directed preparation of in connection with [his/her] employment with the
Company. Nothing contained herein shall be construed to require the return of any
non-confidential and de minimis items regarding Employee’s pay, benefits or other rights of
employment such as pay stubs, W-2 forms, 401(k) plan summaries, benefit statements, etc.






	25.	 	Employee hereby consents and authorizes the Company to deduct as an offset from the
above-referenced severance payments the value of any Company property not returned or returned
in a damaged condition as well as any monies paid by the Company on Employee’s behalf (e.g.,
payment of any outstanding American Express bill).






	26.	 	Employee agrees to cooperate with the Company in connection with any pending or future
litigation, proceeding or other matter which has been or may be brought against or by the
Company before any agency, court, or other tribunal and concerning or relating in any way to
any matter falling within Employee’s knowledge or former area of responsibility. Employee
agrees to immediately notify the Company, through the Office of the General Counsel, in the
event [he/she] is contacted by any outside attorney (including paralegals or other affiliated
parties) unless (i) the Company is represented by the attorney, (ii) Employee is represented
by the attorney for the purpose of protecting [his/her] personal interests or (iii) the
Company has been advised of and has approved such contact. Employee agrees to provide
reasonable assistance and completely truthful testimony in such matters including, without
limitation, facilitating and assisting in the preparation of any underlying defense,
responding to discovery requests, preparing for and attending deposition(s) as well as
appearing in court to provide truthful testimony. The Company agrees to reimburse Employee
for all reasonable out of pocket expenses incurred at the request of the Company associated
with such assistance and testimony.






	27.	 	Employee agrees not to make any written or oral statement that may defame, disparage or cast
in a negative light so as to do harm to the personal or professional reputation of (a) the
Company, (b) its employees, officers, directors or trustees or (c) the services and/or
products provided by the Company and its subsidiaries or affiliate entities. The Parties
acknowledge that nothing contained herein shall be construed to prevent or prohibit the
Company or the Employee from providing truthful information in response to any court order,
discovery request, subpoena or other lawful request.






	28.	 	EMPLOYEE SPECIFICALLY AGREES AND UNDERSTANDS THAT THE EXISTENCE AND TERMS OF THIS AGREEMENT
ARE STRICTLY CONFIDENTIAL AND THAT SUCH CONFIDENTIALITY IS A MATERIAL TERM OF THIS AGREEMENT.





 


8









 











Accordingly, except as required by law or unless authorized to do so by the Company in writing,
Employee agrees that [he/she] shall not communicate, display or otherwise reveal any of the
contents of this Agreement to anyone other than [his/her] spouse, legal counsel or financial
advisor provided, however, that they are first advised of the confidential nature of this
Agreement and Employee obtains their agreement to be bound by the same. The Company agrees that
Employee may respond to legitimate inquiries regarding the termination of [his/her] employment
by stating that the Parties have terminated their relationship on an amicable basis and that the
Parties have entered into a Confidential Separation and Release Agreement that prohibits
[him/her] from further discussing the specifics of [his/her] separation. Nothing contained
herein shall be construed to prevent Employee from discussing or otherwise advising subsequent
employers of the existence of any obligations as set forth in [his/her] Employment Agreement.
Further, nothing contained herein shall be construed to limit or otherwise restrict the
Company’s ability to disclose the terms and conditions of this Agreement as may be required by
business necessity.




	29.	 	In the event that Employee breaches or threatens to breach any provision of this Agreement,
[he/she] agrees that the Company shall be entitled to seek any and all equitable and legal
relief provided by law, specifically including immediate and permanent injunctive relief.
Employee hereby waives any claim that the Company has an adequate remedy at law. In addition,
and to the extent not prohibited by law, Employee agrees that the Company shall be entitled to
discontinue providing any additional Severance Benefits upon such breach or threatened breach
as well as an award of all costs and attorneys’ fees incurred by the Company in any successful
effort to enforce the terms of this Agreement. Employee agrees that the foregoing relief
shall not be construed to limit or otherwise restrict the Company’s ability to pursue any
other remedy provided by law, including the recovery of any actual, compensatory or punitive
damages. Moreover, if Employee pursues any claims against the Company subject to the
foregoing General Release, or breaches the above confidentiality provision, Employee agrees to
immediately reimburse the Company for the value of all benefits received under this Agreement
to the fullest extent permitted by law.






	30.	 	Similarly, in the event that the Company breaches or threatens to breach any provision of
this Agreement, Employee shall be entitled to seek any and all equitable or other available
relief provided by law, specifically including immediate and permanent injunctive relief. In
the event Employee is required to file suit to enforce the terms of this Agreement, the
Company agrees that Employee shall be entitled to an award of all costs and attorneys’ fees
incurred by [him/her] in any wholly successful effort (i.e. entry of a judgment in [his/her]
favor) to enforce the terms of this Agreement. In the event Employee is wholly unsuccessful,
the Company shall be entitled to an award of its costs and attorneys’ fees.






	31.	 	Both Parties acknowledge that this Agreement is entered into solely for the purpose of
terminating Employee’s employment relationship with the Company on an amicable basis and shall
not be construed as an admission of liability or wrongdoing by the Company or Employee, both
Parties having expressly denied any such liability or wrongdoing.






	32.	 	Each of the promises and obligations shall be binding upon and shall inure to the benefit of
the heirs, executors, administrators, assigns and successors in interest of each of the
Parties.




 


9









 











	33.	 	The Parties agree that each and every paragraph, sentence, clause, term and provision of this
Agreement is severable and that, if any portion of this Agreement should be deemed not
enforceable for any reason, such portion shall be stricken and the remaining portion or
portions thereof should continue to be enforced to the fullest extent permitted by applicable
law.






	34.	 	This Agreement shall be governed by and interpreted in accordance with the laws of the State
of Indiana without regard to any applicable state’s choice of law provisions.






	35.	 	[USE THIS LANGUAGE IF OWBPA LANGUAGE (FOR EMPLOYEES AGE 40 OR OVER) IS NOT INCLUDED)
Employee acknowledges that he/she has been offered a period of twenty-one (21) days within
which to consider and review this Agreement; that he/she has carefully read and fully
understands all of the provisions of this Agreement; and that he/she has entered into this
Agreement knowingly and voluntarily.






	36.	 	Employee represents and acknowledges that in signing this Agreement [he/she] does not rely,
and has not relied, upon any representation or statement made by the Company or by any of the
Company’s employees, officers, agents, stockholders, directors or attorneys with regard to the
subject matter, basis or effect of this Agreement other than those specifically contained
herein.






	37.	 	This Agreement represents the entire agreement between the Parties concerning the subject
matter hereof, shall supersede any and all prior agreements which may otherwise exist between
them concerning the subject matter hereof (specifically excluding, however, the
post-termination obligations contained in an Employee’s Employment Agreement, or any
obligation contained in any other legally-binding document), and shall not be altered,
amended, modified or otherwise changed except by a writing executed by both Parties.





PLEASE READ CAREFULLY. THIS SEPARATION AND RELEASE

AGREEMENT INCLUDES A COMPLETE RELEASE OF ALL

KNOWN AND UNKNOWN CLAIMS.




IN WITNESS WHEREOF, the Parties have themselves signed, or caused a duly authorized agent
thereof to sign, this Agreement on their behalf and thereby acknowledge their intent to be bound by
its terms and conditions.



	 	 	 	 	 
	EMPLOYEE

	 	[Company Legal Name]	 	 
	 
	 	 	 	 
	Signed:

	 	By:	 	 
	 


	 	 


	 	 
	Printed:

	 	Title:	 	 
	 


	 	 


	 	 
	Dated:

	 	Dated:	 	 
	 


	 	 


	 	 







 


10











 




Exhibit B




ILLUSTRATIVE COMPETITOR LIST




The following is an illustrative, non-exhaustive list of Competitors with whom Employee may
not, during [his/her] relevant non-compete period, directly or indirectly engage in any of the
competitive activities proscribed by the terms of [his/her] Employment Agreement.



	 	 	 	 	 	 	 
	•

	 	Amico Corporation
	 	•
	 	Anodyne Medical Device, Inc.
	 
	 	 	 	 	 	 
	•

	 	APEX Medical Corp.
	 	•
	 	Apria Healthcare Inc.
	 
	 	 	 	 	 	 
	•

	 	Aramark Corporation
	 	•
	 	Ascom (Ascom US, Inc.)
	 
	 	 	 	 	 	 
	•

	 	Barton Medical Corporation
	 	•
	 	B.G. Industries, Inc.
	 
	 	 	 	 	 	 
	•

	 	CareMed Supply, Inc.
	 	•
	 	Comfortex, Inc.
	 
	 	 	 	 	 	 
	•

	 	Corona Medical SAS
	 	•
	 	Custom Medical Solutions
	 
	 	 	 	 	 	 
	•

	 	Dukane Communication Systems, a
division of Edwards Systems
Technology, Inc.
	 	•
	 	Freedom Medical, Inc.
	 
	 	 	 	 	 	 
	•

	 	Gaymar Holding Company, LLC (Gaymar
Industries, Inc.)
	 	•
	 	GF Health Products, Inc. (Graham
Field)
	 
	 	 	 	 	 	 
	•

	 	Getinge Group (Arjo; Getinge;
Maquet; Pegasus; Huntleigh Technology Plc
(Huntleigh Healthcare, LLC))
	 	•
	 	Intego Systems, Inc. (formerly known
as Wescom Products, Inc.)
	 
	 	 	 	 	 	 
	•

	 	Industrie Guido Malvestio S.P.A.
	 	•
	 	Invacare Corporation
	 
	 	 	 	 	 	 
	•

	 	Joerns Healthcare, Inc.
	 	•
	 	Joh. Stiegelmeyer & Co., GmbH
(Stiegelmeyer)
	 
	 	 	 	 	 	 
	•

	 	Kinetic Concepts, Inc. (KCI)
	 	•
	 	Linet (Linet France, Linet Far East)
	 
	 	 	 	 	 	 
	•

	 	MedaSTAT, LLC
	 	•
	 	Medline Industries, Inc.
	 
	 	 	 	 	 	 
	•

	 	Merivaara Corporation
	 	•
	 	Modular Services Company
	 
	 	 	 	 	 	 
	•

	 	Nemschoff Chairs, Inc.
	 	•
	 	Nurture by Steelcase, Inc.
	 
	 	 	 	 	 	 
	•

	 	Paramount Bed Company, Ltd.
	 	•
	 	Pardo
	 
	 	 	 	 	 	 
	•

	 	Pegasus Airwave, Inc.
	 	•
	 	Premise Corporation
	 
	 	 	 	 	 	 
	•

	 	Radianse, Inc.
	 	•
	 	Rauland-Borg Corporation
	 
	 	 	 	 	 	 
	•

	 	Recovercare, LLC (Stenbar)
	 	•
	 	SIZEwise Rentals, LLC
	 
	 	 	 	 	 	 
	•

	 	Statcom (Jackson Healthcare
Solutions)
	 	•
	 	Stryker Corporation
	 
	 	 	 	 	 	 
	•

	 	Tele-Tracking Technologies, Inc.
	 	•
	 	Tempur-Pedic Medical, Inc.
	 
	 	 	 	 	 	 
	•

	 	Universal Hospital Services, Inc.
	 	•
	 	Voelker AG






 


 









 





While the above list is intended to identify the Company’s primary competitors, it should not
be construed as all encompassing so as to exclude other potential competitors falling within the
Non-Compete definitions of “Competitor.” The Company reserves the right to amend this list at any
time in its sole discretion to identify other or additional Competitors based on changes in the
products and services offered, changes in its business or industry as well as changes in the duties
and responsibilities of the individual employee. An updated list will be provided to Employee upon
reasonable request. Employees are encouraged to consult with the Company prior to accepting any
position with any potential competitor.



(Revised list 10-12-2005)




6152460.3 (OGLETREE)





 


2